How to Control the Costs of Kids' Extracurricular Activities

Parents with kids in after school activities will tell you that all the not only do all the sports practices, language classes and boy and girl scout meetings consume a lot of time, but they eat up a lot of the family budget.

Knowing the true costs and prioritizing extracurricular activities can help you protect your wallet while enhancing your child’s free time.

An after school activity can cost hundreds to thousands of dollars over a childhood, making it more important to budget and plan for such expenses. “The important point from a financial point of view is that you want to think about what works for your kid and your budget,” says Suzanna de Baca, vice president of wealth strategies at Ameriprise Financial.

Since a child’s extracurricular activities are such a big part of family life, they need to be part of the family budget, says Clare Levison, certified public accountant and member of the AICPA’s National CPA Financial Literacy Commission. “You want to consider the activity fee, equipment, uniform expenses and travel costs.” Experts advise trying to stay within your budget when choosing activities.

Identify Your Child’s Interest

“Children change their mind and want to do different stuff,” says Scott Halliwell, certified financial planner at USAA. Planning out extracurricular activities is important since these can have a hefty price tag.

“As far as making the activity choices, that’s a good money lesson to instill because you can’t do it all,” says Levison. To save on expenses, she suggests pursuing activities that a child wants to do rather than what a parent wants the child to be interested in. “You can cut back on activity fees by not suggesting new activities,” says Levison.

When your child wants to try something new, take advantage of free trial months before investing in uniforms and equipment and paying registration fees. “By the end of the month, you’ll know if that’s something your child’s really interested in,” says Levison.

Pick and Prioritize

Kids have to balance school responsibilities and activities while parents work to manage the household budget and their work schedule. Kids need to learn how to prioritize and plan their time also.

“The activities and having to do homework can be stressful for kids and parents and their budget,” says Levison. “If an activity is stressful, it defeats the purpose of the activity.”

You may have to make trade-offs for your child to participate in an activity—have this discussion about what you can and can’t do on a high level because you’ve limited time and money, says De Baca. “Kids respond really well if they’re part of the discussion on a high level.” This conversation may not be appropriate for a kindergartner but as he or she gets older, it’s important that a child understands how you make decisions and trade-offs for the health of the household.

Pinpoint the True Cost of an Activity

Extracurricular activities should appear as a line item in your budget.

One of the best ways to understand an activity’s true costs is to ask other parents, the coach and teachers, suggests De Baca. Participating in an activity may require buying equipment, food, group photos and commemorative T-shirts, as well as paying for hotels and other costs for traveling leagues and parties.

“Parents need to be realistic about what things will cost,” says Halliwell. “Go month by month and try to put a price tag on the known expenses.” When sports season begins, you need to plan for any equipment purchases and registration fees—it’s important to know what you can and can’t afford to do.

To cover unanticipated expenses over the course of the year, Levison suggests adding 10% extra to amounts allocated for any new activities to give your budget a cushion.

What to Budget?

“The budget for the activity increases the household budget overall,” says Levison. You may have higher food costs from eating out since there’s no time to cook, as well as the cost of hiring people to do things you can’t do yourself, like lawn care and cleaning. “It’s time spent on things that cost money instead of time spent on things that are free. The activities take away from these and there has to be a balance.”

Experts caution against spending money on a child’s activities when you don’t have an emergency fund with six months of expenses or aren’t putting money in a 401(k). Balancing short-term needs with long-term savings can be a challenge, says Linda Shelby, regional sales manager at Merrill Edge. “Unless savings was intended for extracurriculars, short-term needs need to be managed with cash flow. Long-term assets and savings should only be used for long-term goals for which it was intended and not for short-term or month-to-month expenses.”

“If you have credit card debt, people need to make a good faith effort to scale back and prioritize,” says Levison. This may not mean pulling your child out of soccer but reprioritizing and cutting back somewhere else like having fewer cable channels or driving back and forth to a game in the same day instead of staying in a hotel.

“For parents whose kids have the desire but they really can’t afford it, there are programs that offer subsidies,” says Shelby. Parents can apply for need-based scholarships on registration forms or volunteer to coach or participate in other ways in exchange for discounted fees.

“You may have to explain to a child that you can only do one activity per month,” says Shelby. If your child still wants to do other activities, figure out how to fit it in so it doesn’t cost money—like participating through a local recreation center or YMCA without being part of a formal league.

Equipment can be expensive and needs to be factored into your budget. “If you can get passed the ‘I want it new’ syndrome, you can buy sports equipment and music instruments used for less than half [the cost of buying it new],” says Halliwell. Some leagues provide equipment. When buying sneakers and clothing, Halliwell suggests spending less on items that you know your child will grow out of in six months.

If you’ve purchased equipment or instruments but your child is no longer interested in that activity, experts recommend selling these to other parents or back to the store to avoid as big of a hit.